At a board meeting, in 2005 Google decided to enter China in an attempt to capture the 2nd largest economy in the world and a market oriented economy with speedily growing private sector. Google first announced a Chinese version of Google.com in 2000 operated in California i.e. outside of China. The Google.com was translated to Chinese from US version and thus the speed of the search engine was slow.
Google made this decision because from a financial view Google noticed China as a vigorous and dynamic growing market regardless of growing competition. As per July 2005, CNNIC estimated that country had 103 Million online users that is 11 % of World's online population. The …show more content…
Increasing internet population at a faster rate and blossoming search market
2. Need for a fast and local search engine by Chinese users
3. Source of Revenues and talent
But after the partial entry into Chinese markets in 2000, Google was blocked twice. Once in 2002 for not complying with government regulation on content. Suddenly because of this computer users were unable to access Google.com and the users were diverted to Baidu.com, one with heavily censored search engine. Google.com was up in 2 weeks but the tightened censorship made it slow and unreliable. So in order to deal with the information control problem, Google stroked an agreement with Chinese government and initiated Google.cn . Google.cn was compiled with identical laws and controlled access to information which was being filtered by the Chinese government on Google.com’s Chinese version. Thus, other than better performance, there was a slight advantage for the company to be in …show more content…
Most of the Chinese users were interested in popular activities like downloading music or movies, online chats, TV shows, etc. Google could not form the customer base because it had no online messaging or email app which its competitor (Baidu) had. Plus Baidu provided its users to download mp3 music and movies for free, which were restricted for free access by Google. Thus the mistake Google made was it did not research about its users and markets and it undermined its competitor. (Baidu)
2. The other major problem Chinese users faced with Google .com was the speed to search results was very slow as it was operated from California, so 10 % of the time it used to buffer, thus turning the users to the fast processing search engine Baidu.
2. Due to inadequate research of Chinese market and Chinese government, Google was not able to stick to the laws and regulation of the country while it's competitor was closely tied to its government. There was a clash between motto of Google "Don't be evil" and Chinese law " Great firewall of China"
3. Also Google could not establish itself as a brand for mainstream users, it was perceived as an outside company i.e. a foreign entity. Thus there was clearly a perception gap between who Google was and how Google was perceived by Chinese